Research Proposal MaK IRf

8/11/2019 Research Proposal MaK IRf

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Future of Indian Trade with SAARC Nation:

Opportunities and Challenges under the

regime of NDA Government (2014)

Research proposal submitted to

MMAJ ACADEMY OF INTERNATIONAL STUDIES

Jamia Millia Islamia

in partial fulfilment of the requirements for the admission in Ph.D.

by

Mayank Gupt


Jamia Millia Islamia,

New Delhi-110025


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Future of Indian Trade with SAARC Nation: Opportunities and Challenges

under the regime of NDA Government (2014)



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INTRODUCTION:

In today's world no nation exists 10 economic isolation. A nation's economy, its

industries, service sectors, levels of income and employment and living standards are

linked to the economies of its trading partners. The benefits of international trade accrue

in the forms of lower domestic prices, development of more efficient methods and new

products and a greater range of consumption choices. In an open trading system, a

country will import those commodities that it produces relatively at a higher cost. Since

resources are channelled from uses of low productivity to that of high productivity, gains

from trade are attained permitting higher levels of consumption and investment. The

world today is at a turning point. The changes that we are undergoing are global in scope,

revolutionary, fundamental and structural in content. As we have entered the 21 st

century a sense of optimism prevails for attaining peace and prosperity through effective

role-play of regional as well as global organizations. Many view asia as having a varietyof characteristics in common with europe of the nineteenth century: underdeveloped

international institutions, mixed domestic orders, rising nationalism, high but differential

growth rates, and bitter, emotional rivalries between insecure neighbours. The success of

states in todays world is not so much measured in terms of capacity for defending

borders or creating uniquely national institutions, but in terms of ability to adapt to

regional and global trends, promote exports, attract investments, and skilled labour,

provide a beneficial environment for transnational companies, build attractive institutions

of research and higher learning, wield political influence on the regional and global

scene, and also brand the nation culturally in the international market-place.

Normally foreign policy initiative is taken by the government. But occasionally in a

democracy that India is, foreign policy initiative emerges from outside the formal

apparatus of the government. Jawaharlal Nehru had once told the constituent assembly:

external affairs will follow internal affairs. Though it is Indias policy in relation to

other nations in the world, foreign policy is essentially made keeping in view the interests

of the society at large. Hence societal inputs are extremely important in the development

of a foreign policy. These inputs come from various sources. People, in a democratic

society, are the most important source of foreign policy initiatives. But, views of the

people are expressed largely by the political parties and the medianewspapers andother print media, as well as the electronic media. political parties are mainly concerned

with acquiring power. It is in the process of their endeavour to acquire political power, or

retain it, that the parties take up foreign policy issues and influence the policy-making

process. Besides, India, like other modern democratic societies, has a large number of

interest/pressure groups. These groups may be in favour of/against a proposed policy, or

they themselves may seek to initiate policy to suit their clients, or constituencies.


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In addition, media, social activists and movements and non-governmental organisations

also contribute to the formulation of foreign policy. They help in regulating Indias

behaviour towards the outside world. India has also fairly developed expert groups which

may be, for the sake of convenience, described as the think tank. These groups study

various foreign policy issues and convey their well-considered views to the government.This unit analyses all these institutions in order to help you to understand as to which

non- governmental bodies make valuable inputs in foreign policy making.

In Indian democracy, one or two or many political parties control government of the day.

Even when one party controls the government, if it is a two party system, the second

party acts as an opposition party and tries to influence nations foreign policy. The

government also anticipates the opposition partys reaction and that itself becomes an

influence in the policy process. The opposition partys policy pronouncements also

become the policy expectations of the people whenever the opposition party becomes the

ruling party. If a party for instance says that it will act to prevent influx of job-seeking

people from across Bangladesh, people will hold it to implement the promise when it

comes to power. However cynical one might be about working of democracy, the fact is

that if a political party fails to fulfil certain important promises, it will lose its credibility

sooner than later. This is most unlike the communist regimes where the communist party

alone determines the foreign policy. When there are a plethora of political parties as is the

case now in India, their influence in the making of policy depends upon their proximity to

the seat of power. One of the major ways in which political parties influence details of

foreign policy formulation is through their manifestos issued during the elections. Cynics

say that party manifesto is like railway platform (in the us, incidentally, manifesto is

called a platform) that is used for the specific purpose of boarding the train (in the case ofpolitics, to get into power) and then all forget the platform. But often, crucial issues

raised in the manifesto become rallying points to the political activists to create public

opinion in favour of it.Thus for instance, the congress (i) in its manifesto for the 1980

general elections had said that if it were elected to power it would extend diplomatic

recognition to heng samarin government in kampuchea then installed by vietnam. Indira

Gandhi was returned to power in January 1980. The communist party of India (CPI) also

highlighted the same issue. The CPI mps began to raise the issue in the parliament to

pressurise the government, which eventually led her to extend recognition to heng

samarin government in July 1980.

The BJP, in its manifesto in 1998, had suggested setting up a national security council for

policy making. The NSC then had found a mention in practically every major political

party. As a matter of fact that was one innovative idea introduced by the Janata dal under

the leadership of v. P. Singh in 1989. The intellectuals and security activists then began to

demand from the v. P. Singh government that they fulfil the promise. Then in October

1990 for the first time v. P. Singh established a national security council. The congress


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party, which had also promised to set up a NSC, did not implement it though it was in

power for five years (1991-96). In 1996 when the united front government came to

power, it also did not implement it though it had promised to do so.

Then came the BJP led coalition government, which formulated its national agenda for

governance and promised to establish a national security council to analyse the military,economic and political threats to the nation and also to continuously advice the

government. The pro-NSC groups brought pressure on the government to fulfil its

promise to establish the NSC. Then the NDA government led by the BJPs Atal Bihari

Vajpayee in November 1998 created an NSC for effective national security policy

formulation.

Smaller political parties may not lead the government, as they cannot win many seats in

the parliament. But these parties can and do lay down the outer perimeters for the

governments in power.


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Details of PHD candidateMayank GUPT

L-13 B Batla House,Jamia Nagar,New Delhi -110025Mob: +91 9990123477E-mail: [email protected]

Scholastic Qualifications

Qualified Junior Research Fellowship(JRF) in 2014

Certificate in Frenchfrom Jamia Millia Islamia in 2014

Masters of Business Administration (2011-13) from Jamia Millia

Islamia, New Delhi

o Modules include :Finance(Major)& Marketing (Minor)

B.Sc.(Chemistry) from Jamia Millia Islamia, New Delhi in 2009.

German Level I from IIT Delhi.

MDP on Export Management from MSME.

Academics: Seminars & Achievements

Took a guest lecture for sales and marketing training at Godrej andLabournet workshop.

Paper Presented atJPIET (Job Satisfaction), Meerut.

Member of Paper Editing & Organizing Committee for theInternational Seminars.

Workshops on Individual Development & Taking Control of Career onFeb 09, 2013 at CMS, JMI


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Attended Youth Entrepreneurship Summit 2013on Feb 11, 2013, DelhiUniversity

Seminar attended: Pakistan Vision in South Asia, Democratic Pakistan.Future of Financial Management, Human Resource and Knowledge

Management, Emerging Paradigm in Marketing, Entrepreneurship&Innovation,

Personal Details

Date of Birth : Dec 07, 1993Father name : Pramod GuptGender : MaleMarital status : SingleNationality : IndianKnown Language : German, French,

Spanish, English & Hindi

CONCISE STATEMENT OF THE RESEARCH PROBLEM AND

KEY RESEARCH QUESTION

The context of this study is the Future Of Indian Trade With SAARC Nation:

Opportunities And Challenges Under The Regime Of NDA Government (2014) and

the concomitant strains in the articulation of the negotiation between regional politics

and international trade.

STATEMENT OF RESEARCH PROBLEM

The International economic environment and the global political balance have undergone

revolutionary changes since the beginning of 1980s. The Introduction of this

development has consequently led to a continuous erosion of multilateral frame work of

trading system: increasing internationalization of production, Further, the formation of

regional grouping of organizations has become a trend in the world economies since the

post world war-Il, not only to strengthen gradual economic integration for overcoming

barriers of global trade policies but also to exploit the potential of complementarities for a

better allocation of available resources to mutual comparative advantage.


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The developments of a productive sector capable of responding to increases in inter

regional demand. Further, REA (Regional Economic Association) is necessary among

developing countries in order to increase the group's bargaining power in its economic

and sometimes political external relations.

The main aim of the present study is to analyse India's foreign trade with SAARC

countries individually and with the Region (which is consortium of less developing

countries) as a whole under the regime of NDA government.

.

SIGNIFICANCEOFTHESTUDY:

Foreign trade assumes significance because they form the core component of the process

of country's growth and employment generation. Therefore it becomes a matter of

paramount importance to study the various options for improving the foreign trade

relationship with various countries and developing countries in particular. Our experience

with European Union market for Indian exports and various rigidities in terms of newer

trade barriers makes us to think of the possibilities of improving and diversifying trade to

the countries closer to us. An enquiry into the role of NDA governmentsrole in foreign

trade.


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OBJECTIVESOFTHESTUDY:

Following are the specific objectives of the present study:

To analyze the trends in Indias aggregate exports and imports for the

Period 1991-92 to 2012-2013

To analyze the SAARC intra regional trade before and after

NDA government.

To outline the scope for co-operation in areas like regional projects,

Physical infrastructure and regional tourism.

To make recommendations to improve and consolidate Indias trade with

SAARC countries.


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RESEARCH METHODOLOGY AND DESIGN

The methodology will be a broad analytical framework encompassing the various

facets of regional economic co-operation. This Framework is considered useful

for two important reasons. The first is that it provides a rational basis for

establishing regional economic co-operation. This helps in removing the

apprehensions about the prospects of regional economic co-operation. The second

reason is that this framework also facilitates in identifying the appropriate policy

instruments and strategies for achieving the objectives of regional economic co-

operation. The study will also outline the supporting institutional mechanisms in

areas related to trade and investment. Such mechanisms often play a crucial role

in strengthening the efforts of regional economic co-operation. Furthermore, the

issues concerning regional trade liberalization are many, and to understand the

ground realities, there is a need for having varieties of databases and adoption ofnumber of suitable approaches.

1.5 (a) sources of data and tools of analysis:

1. HISTORICAL ARCHIVE


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EXPECTED ACADEMIC OUTPUT, STRATEGIC AND/OR

PRACTICAL SIGNIFICANCE OF THE STUDY

LITERATURE REVIEW

Ransi Sahney and William DipPietro1 pointed out that in recent years investigation of the

relationship between export expansion and economic growth has received considerable

attention in the literature. The findings strongly support the argument that export

expansion leads to higher economic growth thereby suggesting the overall superiority of

an export led growth strategy for development to one of import substitution. The

theoretical argument maintained in the study is that export expansion results in both more

efficient use of resources and adoption of latest technology. Hence the authors state that

several empirical studies assessing the importance of exports for economic growth in

developing Countries have used exports as a factor of production by estimating

production function based growth equation. DiePietro and Sahney conclude from their

findings that export expansion contributes to overall economic growth and that

the importance of exports changes with the level of development.


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Sukumar Nandi and Basudeb Biswas' have done empirical work to investigate

the relationship between exports and economic growth in India. Their econometric results

show that in Indian context, causality runs one way i.e., export growth causes growth of

national income and hence they conclude that it leads to support the hypothesis that

exports can help economic growth of a country. However, they do point out that this iscontrary to the view in the literature that export growth cannot be helpful in the context of

countries like India. Nandi and Biswas do admit that the study done is based on Indian

data only and that a more broad based study covering a number of countries may shed

more light in this direction. Empirical investigations reveal that the developing countries'

import demand of various goods has been sensitive to relative price differences on the

one hand, between imports and domestically produced goods and on the other, between

imports from developing and from developed countries. These results support the view

that growing trade among developing countries, in particular, their imports from each

other has not been due merely to income growth but relative price differences between

developed and developing country suppliers have played a major role. Prabirjit Sarkar'

examines the patterns of trade movements of inter-regional terms of trade between the

developing and developed market economies for the period 1950-80. He comes to the

conclusion that the post-second world war period saw a tremendous growth in world

trade in merchandise. During the three decades (1950-80), world exports and imports (of

visible) rose at an abnormal growth rate of about 11 percent. Over the three decades the

rates of growth accelerated from 6.4 percent during 1950-60 to above 9 percent during

1960-70 and further to above 10 percent in the last decade, 1970-80. V.L.Ra04 states that

foreign investments into India as a result of the trade policy changes announced since

July 1991, is encouraged to increase at a faster rate. Foreign investors urged India toallow foreign firms to hold 100 percent stake in subsidiaries, cut tariffs and improve

infrastructure. He states that trade reforms and other economic reforms are a good thing

for any country. However, their usefulness depends on a credible and stable macro

economic framework and the institutional and other mechanisms to implement and

sustain the reforms. Emphasis should shift from debates on market vs. State,

liberalization vs. non- liberalization and privatization vs. Nationalization to (a)

identifying the optimal forming and sequencing of economic liberalization and (b)

effective Government business partnership. Sen and Das5 points out that trade policy in

India has been subject to significant shift since the beginningofthe1990's.Their

observations are that, the policy of import liberalization implemented since early nineties

seems to have inflated the import bill by causing expansion in the volume of imports both

in absolute terms and as proportion to GDP when both imports and GDP are measured in

current prices. The export link to imports seems to have lost its purpose especially with

the premium based incentives to exporters open to sharp fluctuation and down trends.

The export linked import licensing has contributed to an increase in the value of licenses

issued.


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N.N. Dhuldaya' remarked that no South Asian country would be able to enjoy the fruits

of development if it did not join hands with others in the region. Further, there would also

be a possibility of other well-grayed countries from outside the regional shaping thedestinies of ungrouped ones. He stated that a set of guiding principles, the

complementarities of interests, subsidiary of functions, identification of specific areas of

inter-regional co-operation and mutual understanding on international trade in terms of

common interest would help,. Further, according to him there would also be freedom of

operation across physical front to get the most out of available resources. As reported in

the Financial Express, SAARC has made remarkable progress in terms of preparing a

comprehensive regional study on the "causes and consequences of natural disasters and

the protection and preservation of the environment". The committee on Environment,

which was subsequently established, is fully engaged in the task of translating the

recommendations of the study into concrete programs and activities.

Arif A. Waquifl examined the development from SAARC to RECSA. India, Bangladesh,.

Nepal, and Sri Lanka formed the Committee on Studies for Co-operation in Development

(CSCD) in South Asia, which began its exploratory regional research program in 1977-

78. In the first phase 1977-78 to 1982-83, the CSCD initiated and coordinated

exploratory research primarily in the areas of Regional Economic Co-operation in South

Asia (RECSA). These studies dealt mostly with potential areas of regional co-operation

in trade and natural resources and infrastructure development. During its second phase,

the CSCD organized regional research studies in other potential areas of co-operationincluding foreign exchange payments, industry, energy, technology and even politics and

interregional relations. The third phase is collaboration with an increasing number of

institutions and expanded still further the scope of CSCD studies into areas like

collaborative regional industrial development and co-operation in media. He argues that

bilateral issues and political militants should not hinder the growth of regional economic

co-operation between SAARC countries. The benefits of such co-operation and the costs

of non-eco-operation are both substantial. What will accelerate the movement from

SAARC to RECSA is the underlying belief supported by the analysis of the benefits of

co-operation and the costs of non-eco-operation that regional co-operation may be

difficult but it must succeed.


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REFERENCERansi Sahney and William Dipietro, "Exports, Foreign Debt and Economic Growth:

Evidence from Cross Section Data". Indian Economic Journal, Vol. 38 1991.

2. Sukumar Nandi and Basudeb Biswas, "Export and Economic Growth in India:Empirical Evidence". Indian Economic Journal Vol. 38 1991.

3. Prabirjit Sarkar, "Patterns of trade and Movements of Interregional Terms of Trade

between Developing and Developed Market Economies 1950- 80". Journal

ofCommonMarketStudies1985.

4. Rao VL, "Trade Reforms, Global Developments and Indian Response in Global andIndian Trade policy Changes". Anupama Publications New Delhi 1992.

5. Sen and Das, "Import Liberalisation as a tool ofEconomicPolicyinIndia - A Perspectivefrom the mid 1980s to Dec. 1991. Anupama Publications New Delhi.

6. Rao M.S, "Trends and Determinants of India's Foreign Trade". Chugh Publications

New Delhi 1991.7. Dhuldaya, FinancialExpress 29.04.92.

8. Arif A Waquif, "From SAARC TO RESCA". Financial express 24.12.92.

9. Mukherji I.N, "Feasibility of a Prefferential Trading Arrangement in South Asia".FinancialExpress 16.04.92.

10. Kemal AR, "Trade Expansion in South Asia: Liberalisation and Mechanisms". Mc

MillanIndia.11.Research and Information Systems, "Economic co-operation in the SAARC Region,potential constraints and policies". Interest Publications.

12. Mehtha R, "An Econometric model of India in SAARC link". Oxford Publishing Co.

13. Bhargava, Mukherji, Prasad and Wadhwa, "South Asia - Towards Dynamism and Co-

operation". South Asia Journal 1992.14. Panchamukhi, and Rao V.L, " Economic Co-operation in the SAARC Region -

Potential Constraints and Policies". Interest Publications New Delhi.

Documents

Research Proposal MaK IRf